The social sector’s micro problem

What ever happened to thinking big? In the social sector, thinking small, micro to be exact, is all the rage, and perhaps with some reason. The blunt force of macro interventions like clumsy development aid have drawn the intense scrutiny of people like Bill Easterly.

Failing the success of sweeping interventions, the sector has recently become obsessed with micro solutions to social problems. The wave of micro activity started with the popularity of microcredit, but has recently devolved into a flurry of any philanthropic word pre-fixed with “micro” such as micro-volunteering, micro-donations, micro-philanthropy, and micro-actions.

My macro point here is that the momentary micro dogma of the social sector distracts us from pursuing real solutions that help people.  What matters, of course, is what works, small, medium, large, or super-sized.  The micro-trend was started by microcredit, the first, and only member of the “micro” solution set that resembles a real intervention rather than a gimmick focused more on size than effectiveness.

Microcredit is micro in so far as it is a small loan to an impoverished person, ostensibly used for wealth creating activities. While microcredit has been heralded in some circles as a powerful poverty-reduction tool, recent evaluative research has raised some important questions. Specifically, David Roodman speculates there might be a microcredit bubble in Bangladesh. Roodman writes

Indeed, multiple borrowing is widespread in Bangladesh now, and it has raised concerns that some Bangladeshis are juggling microcredit loans the way some Americans juggle credit card debt, in a merry-go-round that must one day stop.

As borrowers acquire multiple loans their debts becoming increasing less micro, raising doubts about microcredit’s core promise that the poor need only small loans to lift themselves out of poverty, a falsehood promoted more by Kiva’s marketing than the fundamental tenants of the microcredit movement.

While the idea that a modest investment by Western standards can create sustainable businesses is appealing, evidence of multiple borrowing undermines this hope. Even though most people involved in the day-to-day development of microcredit as a poverty intervention strategy take a sophisticated, nuanced approach to microcredit, its widespread popularity has less to do with actual outcomes and more to do with the suggestion that solving big problems only requires small actions.

And here, I believe, is where the micro thinking begins to unravel.

The current adherence to the micro dogma does not come from a measured understanding of effectiveness of micro approaches. Instead, our fascination with all things micro stems from a hope that simple, small, and intuitive sounding actions can solve tremendously complicated problems. By attempting to reduce the daunting magnitude of poverty to something we can solve through trivial investments, shopping, and meaningless minute-at-a-time volunteer activities, we simply aggregate our micro inabilities to solve social problems into a macro inability to solve social problems.

Over on the Tactical Philanthropy Blog comments section reader Chip McComb sums up the problem with micro giving nicely, in so doing revealing much of what is wrong with micro thinking in general. Chip writes

I fear that as micro giving, and mobile giving becomes more and more prevalent the attitude of those that give, could shift dangerously to think that all giving should be as easy and as pleasing as buying a coke or a big mac, and when it’s not easy or pleasing, it is therefore not worth their time or expense. What a dangerous trap!

I am not arguing that all micro efforts are problematic. There are some great virtues of thinking small, so long as micro means local approaches to social problems, small strategic investments (like microcredit), or other such reasoned uses that resemble actual strategies. My problem with the current wave of micro thinking is that micro has become a euphemism for easy.

Ultimately, what matters is providing solutions that work. In some cases, small interventions might work best, like microcredit, in other cases, perhaps our investments need to be large and patient, rather than micro, like Acumen Fund’s approach to social investing. Whatever the size of the intervention, all our approaches should be well reasoned and rigorously evaluated.

Of course, unlike our modern micro interventions, evaluation is hard, even if it is indispensable in expanding what works and purging what does not.  Recognizing both the importance and complexity of evaluation, perhaps I should pursue the idea of micro-evaluation, a simple evaluative framework that is as easy to use as it is meaningless.